Australia: Australia's evolving legal position on use of other trader's brands in online advertising

Introduction

The law in Australia continues to develop regarding use of
competitor brands including use in domain names, in the content of
online ads and use of Google Adwords.

Google's position is now clear with the Australian High
Court unanimously holding in Google Inc v Australian competition
and consumer commission (2013) HCA 1 that Google was not liable for
misleading or deceptive conduct in respect of advertisements
published using its online Adwords service, in circumstances where
other traders' brands were used in online advertisements
(Google Case) . The High Court determined that "Google has no
control over a user's choice of search terms or an
advertiser's choice of keywords" and should not be
responsible for misleading or deceptive conduct of its customers,
as the advertisements were predetermined by the advertisers, not
Google.

While Google's position in Australia may be clear, various
advertisements in the Google Case were found to be misleading and
deceptive, and the traders held responsible for those
advertisements.

So while Google may permit businesses to bid on and use terms
(including other traders' trade marks), businesses must tread
carefully when deciding what terms to use and how to use them
online.

Below we look at some recent Australian cases to review the
Australian Courts' views of what will and will not be
permissible conduct online and also touch on Google's own
policy (post the Google Case).

Google - A Change in Policy

After the Google Case, Google amended its AdWords Trademark
Policy (Policy) in Australia to mirror the Policy in other parts of
the world.

Before 23 April 2013 (because of decisions in the Google Case in
the Courts below) if a trade mark was being used as a Google Adword
in Australia, trade mark owners could file a Google Adword
Complaint. Google could then (under its Policy) restrict the use.
Under the updated Policy, Google no longer restricts advertisers
purchasing and using trade marks as keywords in Google Ads
(formerly known as "sponsored links"). Google will now
only restrict use if the trade marks are used and actually appear
in the text of the resulting Google Ad.

As such, trade mark owners can still complain to Google about
unauthorised use of their trade marks in ad text (including as a
domain name), and Google can take steps to restrict this use.
However, the Policy is limited in its application. For example,
Google will:

Only investigate claims where the trade mark is an exact match
to the registered trade mark. Near matches to a trade mark will not
be investigated. For example if your mark is "Two Left Feet
Dance Company" and the mark you are complaining of is
"Two Left Legs Dance Company", your complaint is unlikely
to be investigated;

Not review claims where a trade mark is being used as a
subdomain. For example, if you own the domain name
"twoleftfeet.com.au" and you lodge a complaint about the
domain name "twoleftfeet.twoleftlegs.com.au", this
complaint is unlikely to be investigated.

Further, a Google Ad may only be taken down temporarily. There
are instances where the writers have made a complaint, only to find
that an offending Google Ad reappears weeks later. This places a
time consuming and costly burden on brand owners and may require
multiple complaints regarding the same advertisement.

Additionally, there is a level of scepticism as to Google's
commitment to enforcing its own policies. For example, on 24
October this year Google published a large banner ad alongside the
search results for "southwest airlines". In 2005, then
Google executive, Marissa Mayer, stated:

"There will be no banner ads on
the Google homepage of Web search results pages," and that
"There will not be crazy, flashy, graphical doodads flying and
popping up all over the Google site. Ever."

The Policy, although still an option for brand owners, is not a
robust mechanism for dealing with online advertising issues.
Particularly given its limited parameters and apparent lack of
consistent enforcement by Google.

While traders can be guided by the Policy, other traditional
areas of law are also being used in Australia to determine these
types of disputes and are shaping the parameters of acceptable
conduct, including trade mark infringement, misleading and
deceptive conduct and passing off, as some of the cases below
illustrate.

Since the Google Case, the Australian Federal Court has dealt
with a number of disputes relating to online advertising and
related conduct. The cases cover a number of issues, but below we
highlight some of the key determinations of the Court that might
guide traders as to the boundaries of acceptable conduct in
Australia currently. Additionally, these cases also illustrate that
whether or not use by one trader of another trader's brand (or
part of it) will be found to be unlawful, might also depend on the
distinctiveness of the brand itself.

Lift Shop Case

Lift Shop Pty Ltd (Liftshop) v Easy Living Home Elevators Pty
Ltd (Easy Living) [2013] FCA 900 dealt with issues of search engine
optimisation, a useful strategy for brand owners, as it can propel
a website into the ever coveted first page of search engine
results.

Lift Shop owns the following Australian registered trade
mark:

(Lift Shop Mark).

Lift Shop and Easy Living are competitors in Australia. Both
supply elevators and lifts within the same price range and trade
within New South Wales, as well as online.

In 2011, Easy Living employed the assistance of a search engine
optimisation agency to tailor its website located at www.easy-living.com.au
(Website) and the content of its home page, so it appeared higher
in search engine rankings for particular key words. In particular,
the term "lift shop" was selected as a key word and added
into the title of the Website and home page.

misleading and deceptive conduct; and passing off (although this
action was not pursued at the hearing).

The Court found that whilst one of the objectives of Easy Living
was to appear in the same search results as Lift Shop, it did not
mean that Easy Living was suggesting that it was, or associated
with, Lift Shop.

The term "lift shop" was found to have a generic
connotation and the Court gave consideration to the fact that other
businesses in the same market were also identified if a search for
"lift shop" was conducted.

Easy Living did not try to associate itself with Lift
Shop, but instead endeavoured to obtain business by openly
competing with Lift Shop. Easy Living provided evidence that it did
not want to be associated with Lift Shop's business and that
its reputation was not enhanced by any association, as it was a
supplier of European goods and Lift Shop supplied Chinese
goods.

The Court determined there were a number of differences between
the entries on the respective search pages reinforcing the view
that the parties were not associated. Emphasis was placed on the
fact that before any meaningful commercial exchange could take
place, potential customers would need to take a further step by
entering either of the parties' websites, at which point it
would be obvious that the two parties were not related.

The Court found that Easy Living was using the term "Lift
Shop" in the title of its Website in a descriptive manner to
maximise search rankings. It was not being used as a 'trade
mark'. Other businesses in the industry were also using the
descriptive term "lift shop" in the title of their
websites to boost rankings.

Lift Shop's application was dismissed. This case illustrates
the difficulties faced by brand owners who have, as part of their
trade mark a descriptive element. Had the facts of this case
involved a trade mark without a descriptive element, it is likely
that Lift Shop's case would have been a far stronger one and
perhaps the ultimate result more favourable.

Thredbo (Ski Resort) Case

In Kosciusko Thredbo (KT) v ThredboNet Marketing (TNM) [2013]
FCA 562, KT had, since 1987, owned the head lease of Thredbo, as
well as all the mountain operations such as the lift infrastructure
and ski school. It also owned and operated the website located at
"Thredbo.com.au". KT did not at the relevant time, own
any registered Australian trade marks containing the word
Thredbo.

TNM leased out a small number of apartments in Thredbo and
advertised through the website located at Thredbo.com and had also
registered numerous business, domain and company names containing
the word "Thredbo".

KT claimed, among other things, that TNM's conduct in
registering domain, company and business names containing
"Thredbo", and in particular the operation of its
websites with similar content and branding to KT's, constituted
misleading and deceptive conduct.

KT also claimed that TNM used similar get up to KT, including
the use of the colour red, similar fonts, phrases, and slogans. KT
also provided examples of confusion from customers making
accommodation bookings.

KT also argued that TNM's use of a hyperlink and website
address known as the "Genkan link" was sufficiently
similar to that of KT's slogan "My Thredbo" (depicted
above) to constitute misleading and deceptive conduct by TNM.

The Genkan link contained the address of www.
thredbo.com/mythredbobooking.htm and was provided by an automated
booking system via email to all TNM's customers. The link
opened to a webpage entitled 'My Thredbo Accommodation
Booking'.

The Court determined there was no misleading or deceptive
conduct in relation to TNM's domain names, slogans or websites
(with the exception of those that used the term 'My
Thredbo'). Instead, it was found that TNM's conduct
constituted legitimate competition in the business of providing
accommodation services and facilities.

The Court did, however, find in relation to the Genkan link and
the use of "My Thredbo" on TNM's website, that there
was a real risk that use of the link could mislead reasonable
consumers into believing that the Genkan link was affiliated with,
or part of, the business of KT. Relief was available to KT in
respect of the Genkan link, however not in relation to the
remainder of its claim.

Given the term Thredbo comprises a geographical location, this
case is another illustrating the difficulties with protection of
marks with a descriptive flavour.

Real Estate Advertising

In REA Group Ltd (REA) v Real Estate 1 Ltd (RE1) [2013] FCA 559
the Court looked at various domain names and logos which had also
been registered as trade marks.

The Court determined that the essential or distinguishing
feature of REA's Mark was the domain name in its entirety, as
the words "real estate" alone were descriptive of the
goods and/ or services of REA. It held that the RE1 Logo was not
deceptively similar to REA's Mark and did not infringe
REA's Mark as the RE1 Logo was differentiated by the use of the
capital E; the orange colour; different font; and the placement of
the house after the words "realEstate1", which meant that
the words "realEstate1" were the dominant feature of the
RE1 Logo.

It was noted that "realestate.com.au" was both a brand
and a domain name and that each of the RE1 Domains was deceptively
similar to REA's Mark, as it was likely that a consumer would
look at the whole of the domain name and that some consumers would
not notice the "1". As such they would infringe REA's
Mark.

When comparing REA's Commercial Mark to RE1's Commercial
Logo, the Court found that the RE1 Commercial Logo did infringe
REA's Commercial Mark, as the main feature of RE1's
Commercial logo was the word "realcommercial" which was a
word invented by REA. It was determined that each of the RE1
Commercial Domains infringed REA's Commercial Marks.

Claims for misleading and deceptive conduct and passing off
failed. The Court found that the use of
"realestate.com.au" by REA clearly distinguished REA from
other competitors in the market. RE1's use of similar branding
to REA was not necessarily done with an intention to mislead and
deceive, despite RE1's "less than honourable" reasons
for using such branding. The use of the number 1 was enough to
alleviate consumers of confusion with REA's branding.

Further, it was unlikely that a consumer would mistakenly click
on RE1's website, as the first few pages of any search engine
results were to pages on REA's websites and if a consumer
mistakenly went to an RE1 website, the consumer would immediately
know they went to the wrong website given REA's dominance of
the market. Further, RE1's organic results and sponsored link
activities did not establish that a substantial number of
"ordinary" or "reasonable persons" were, or
were likely to, have been misled or deceived.

The case also highlights again the difficulties of claiming and
protecting a monopoly in a brand that uses descriptive words.

Vendor Advocacy Case

Finally, the case of Vendor Advocacy Australia Pty Ltd (VAA) v
Seitanidis [2013] FCA 971. Unlike the REA case, there were no
relevant registered trade marks and the matter was determined
solely on the basis of misleading and deceptive conduct and passing
off.

The claim was brought by VAA, a business conducted by Ian Reid,
against Mr Seitanidis (who worked previously for VAA either as an
employee or contractor).

VAA routinely used the following types of branding, but did not
hold any trade marks.

The conduct complained of by Mr Seitanidis included the
registration and use of a large number of domain names including
the term "vendor advocacy" and related conduct, including
placing various Google Adwords campaigns which:

contained the phrase 'Vendor Advocacy Australia – a
free service to omesellers.';

VAA did not claim a monopoly on the term "Vendor
Advocacy" which was generally used in the industry, but wished
to prevent conduct of Mr Seitanidis which it said would lead to
consumers being misled into contacting Mr Seitanidis' business
when they were looking for VAA.

In yet another case involving terms which were descriptive and
used by other traders, the Court was not satisfied that VAA could
prove the required reputation and secondary meaning. Part of the
problem was that the focus of the promotion of VAA had centred
around Ian Reid, such that the Court did not think consumers would
be misled if they came across the terms "vendor advocacy"
or "Australian Vendor Advocacy", into thinking it was, or
associated with, VAA.

The Court also considered that consumers dealing with online
advertising, including use of descriptive terms in similar domain
names by different traders, would not necessarily be misled and
consumers would be "vigilant when confronted... with many
domain names referring the phrase "vendor
advocacy"". Use of descriptive terms by competing
businesses, likewise, would not necessarily constitute misleading
and deceptive conduct. In the circumstances of this case, if
consumers were faced with various websites using the descriptive
term "vendor advocacy" they would not assume an
association between the various businesses, although may be
"confused" as to the various vendor advocates. However,
this was because of use of the descriptive term and not because of
anything Mr Seitanidis may have done.

Unlike REA (who could rely on its trade marks) VAA was not so
lucky and failed in its proceedings.

Conclusion

An issue left undetermined to date, is whether or not the
bidding on key words by businesses which are registered trade marks
of other brand owners, might in itself give rise to some form of
infringing conduct or a threat to so engage.

The law in the area of online advertising will continue to
evolve in Australia. The cases to date highlight some key issues
for brand owners including when brands are chosen which include
descriptive words. In these circumstances, stopping use by other
traders in online advertisements (or otherwise) will be more
difficult and without registered trade marks, perhaps
impossible.

Businesses need to remain diligent about their own online
advertising strategies, as well as protecting their brands and
trade marks from mis-use by other traders.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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